IMFhttp://www.ekklesia.co.uk/taxonomy/term/1320/all
en$61 billion funding gap for impoverished countrieshttp://www.ekklesia.co.uk/node/22940
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<p>Impoverished country governments could be up to $61 billion worse off in 2016 as a result of the crash in global commodity prices and strengthening of the US dollar. This is reducing government revenue and increasing the relative size of debt payments in foreign currencies.</p>
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<p>Impoverished country governments could be up to $61 billion worse off in 2016 as a result of the crash in global commodity prices and strengthening of the US dollar. This is reducing government revenue and increasing the relative size of debt payments in foreign currencies.</p>
<p>An analysis of low and lower middle income country governments by the Jubilee Debt Campaign finds that there have been significant falls in government revenue, and increases in debt payments, compared to what was expected just three years ago. This leaves many countries facing a large funding gap on what was expected. For comparison, this is $13 billion more than the $48 billion of aid which is claimed by the OECD to be spent in the 51 countries included in the study.</p>
<p>Tim Jones, economist at the Jubilee Debt Campaign, said: “Many impoverished country governments are being hit by the fall in prices for the commodities they export, and large depreciations of currencies against the dollar. This is reducing government revenue, and increasing the relative size of debt payments in foreign currencies. On top of this, less tax is being collected than had been expected.</p>
<p>“In the 1980s commodity prices crashed and the US dollar rose, and the result was 20 years of debt crisis and large increases in poverty. To ensure history is not repeated, urgent global action is needed to cancel debts owed to reckless lenders, tackle tax avoidance and evasion, and change global trade rules to enable countries to diversify out of basic commodities.”</p>
<p>Jubilee Debt Campaign calculated the figures by comparing IMF and World Bank predictions from 2013 with those conducted between August and December 2015, since the most recent falls in commodity prices and exchange rates. It found that external debt service payments in 2016 will now on average be 10.8 per cent of government revenue, compared to 6.1 per cent predicted three years ago.</p>
<p>The main reason for these changes is that the fall in exchange rates and commodity prices means governments are receiving fewer dollars than had been expected. In addition, governments are collecting less tax revenue as a proportion of GDP than expected, and external debt payments are also higher. The IMF’s commodity price index has fallen by 26 per cent since July 2015.</p>
<p>Three of the countries impacted by falling exchange rates and revenues from commodities are Ghana, Mozambique and Sierra Leone.</p>
<p><strong>Ghana<br /> </strong>The Ghanaian Cedi has fallen by 50 per cent against the US dollar since the start of 2013 after falls in prices for commodity exports such as oil and gold, and lower oil production than expected. It had been forecast three years ago that government revenue would be $12.6 billion in 2016, but now it is only expected to be $8.2 billion. In addition, external debt payments are expected to be $2.5 billion in 2016, when the previous IMF and World Bank prediction was $0.9 billion. In total this means external debt payments are now projected to be 30.2 per cent of government revenue in 2016, up from 7.4 per cent.</p>
<p><strong>Mozambique<br /> </strong>Since the beginning of 2013, the Mozambique Metical has fallen 40 per cent against the US dollar. Prices for Mozambique commodity exports such as aluminium, oil, coal, gas, titanium and sugar have been falling. Mozambique is now expected to spend 10.1 per cent of government revenue on external debt payments in 2016, compared to a prediction of 6.7 per cent three years ago. Government revenue is down from a predicted $5.3 billion to $4.9 billion. External debt payments are up from a predicted $350 million to $500 million.</p>
<p><strong>Sierra Leone</strong><br /> Sierra Leone’s economy has been hit both by the Ebola crisis and the collapse in price of its main export, iron ore, which has fallen by 75 per cent since the start of 2013. Government revenue in 2016 is now expected to be $470 million compared to a prediction of $760 million three years ago. Debt payments in 2016 will actually be lower than previously predicted ($40 million rather than $57 million), primarily because of a suspension of debt payments to the IMF in response to Ebola. However, the fall in government revenue means that external debt payments will be 8.6 per cent of government revenue, rather than a previously predicted 7.5 per cent</p>
<p>Moreover, payments to the IMF will resume again in 2017, making the deterioration worse. In 2017, 10.9 per cent of government revenue is now expected to be spent on external debt payments, compared to a prediction of 6.7 per cent three years ago.</p>
<p><strong>Methodology<br /> </strong>The IMF and World Bank conduct Debt Sustainability Assessments for low income and some lower middle income countries. These predict GDP, government revenue and debt payments into the future. Eighteen countries have had such assessments since August 2015.</p>
<p>Jubilee Debt Campaign compared the figures in these assessments with those conducted for the same countries in 2012 or 2013, whichever was available. This found that across the 18 countries:</p>
<ul>
<li>• External debt service is now predicted to be on average 10.8 per cent in 2016 and 9.7 per cent in 2017. It had previously been predicted to be 6.1 per cent in 2016 and six per cent in 2017.</li>
<li>Predicted government revenue across the 18 countries is down by $19.5 billion in 2016 and $17.3 billion in 2017, falls of 20.1 per cent in 2017 and 17.8 per cent in 2017.</li>
<li>Predicted external government debt payments across the 18 countries are up by $3.5 billion in 2016 and $2.7 billion in 2017, increases on what was previously expected of 74.4 per cent in 2016 and 45.3 per cent in 2017.</li>
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<p>Across the 18 countries, they are collectively $23 billion worse off in 2016 and $20 billion worse off in 2017.</p>
<p>Jubilee Debt Campaign then used the average changes and applied these to other low and lower middle income countries with predictions in 2012 and 2013, a further 33 countries. If the average changes are replicated for these countries, then government revenue will be down by a further $34.1 billion in 2016, and debt payments up by $3.9 billion, a $38 billion loss in total. This added to the $23 billion makes a total loss in 2016 of $61 billion. The equivalent figure for 2017 is $53 billion.</p>
<p>*See the list of countries and the detailed calculations <a href="http://jubileedebt.org.uk/wp-content/uploads/2016/03/Summary-of-financing-gap-statistics_18.03.16.pdf">here</a></p>
<p>* IMF Commodity Price Index <a target="_blank" title="IMF Commodity Price Index" href="http://www.imf.org/external/np/res/commod/index.aspx">here</a></p>
<p>* Jubilee Debt Campaign</p>
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Living EconomyNews Briefcommodity pricesdebt cancellationIMFindebted countriesjubilee debt campaigntax avoidancetax evasionus dollarWorld NewsMon, 11 Apr 2016 09:34:16 +0000agency reporter22940 at http://www.ekklesia.co.ukTen years since debt cancellation agreement, new crises threaten Africahttp://www.ekklesia.co.uk/node/21783
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<p>Lending levels to the most impoverished countries in the world have tripled, ten years after the G7 finance ministers agreed a debt cancellation deal for low income countries.</p>
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<p>Lending levels to the most impoverished countries in the world have tripled, ten years after the G7 finance ministers agreed a debt cancellation deal for low income countries, potentially setting a new debt trap for the countries that benefited from the deal.</p>
<p>The debt cancellation agreement made in London in 2005 by the G7 Finance Ministers has led to $130 billion of debt being cancelled for 36 countries, most recently Chad in May 2015. This has reduced the money governments were spending on debt payments, and has helped lead to improvements in public services.</p>
<p>Tim Jones, economist at the Jubilee Debt Campaign, said: “Debt cancellation was vital in 2005 for countries to get out of the debt trap, and help provide essential services such as healthcare and education. However, nothing was done to prevent reckless lending re-creating debt crises, as is now seen in Europe. Governments continue to bailout lenders, incentivising them to continue acting recklessly, whilst giving large amounts of their ‘aid’ money as loans.”</p>
<p>Since 2005, for the 36 countries which had some of their debts cancelled:<br />
• Their debt payments have fallen from 10 per cent of government revenue to four per cent<br />
• The proportion of children completing primary school has increased from 51 per cent to 66 per cent<br />
• The number of women dying in childbirth has fallen from 680 per 100,000 births to 500</p>
<p>However, figures calculated by the Jubilee Debt Campaign, based on data from the World Bank, show that loans to impoverished country governments have increased by 40 per cent in just one year, and have more than tripled since 2005.</p>
<p>Lending to ‘low income countries’ increased to $17.3 billion in 2013, the latest year with figures available, up from $12.2 billion in 2012 and $5.1 billion in 2005. Of the loans since the global financial crisis began in 2008, 63 per cent are from multilateral institutions, primarily the World Bank and International Monetary Fund, 27 per cent from governments such as China, Japan, France and Germany, and 10 per cent from private lenders.</p>
<p>Research by the Jubilee Debt Campaign, based on IMF and World Bank figures, has shown that debt payments for low income countries are set to increase from four per cent of government revenue today to up-to 13 per cent by the early 2020s. Many countries could see debt payments increase by even more, with Ethiopia, Ghana, Rwanda, Senegal, Tanzania, Uganda and Zambia all among the countries which could be spending over 20 per cent of government revenue on foreign debt payments by the early 2020s.</p>
<p>In September 2014, the United Nations passed a resolution to begin negotiations on creating a ‘bankruptcy’ process for governments. Such a mechanism would indicate that reckless lenders would no longer be bailed out by the IMF and other public institutions, as has happened in many developing countries as well as Greece. Just 11 countries voted against the UN negotiations taking place, but this included the UK, US, Germany and Japan. The next negotiating session at the UN will take place on 30 June to 2 July 2015.</p>
<p>On 11 June 2005, the G7 Finance Ministers meeting in London agreed to cancel the debts of so called Heavily Indebted Poor Countries owed to the IMF, World Bank and African Development Bank. The 36 countries which have had debts cancelled under the scheme are Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Republic of Congo, Democratic Republic of Congo, Cote d’Ivoire, Ethiopia, the Gambia, Ghana, Guinea, Guinea Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Tanzania, Togo, Uganda, Zambia.</p>
<p>* Jubilee Debt Campaign <a href="http://jubileedebt.org.uk/" title="http://jubileedebt.org.uk/">http://jubileedebt.org.uk/</a></p>
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Living EconomyNews BriefAfricadebt cancellationG7IMFjubilee debt campaignWorld BankWorld NewsThu, 11 Jun 2015 23:00:00 +0000agency reporter21783 at http://www.ekklesia.co.ukChristian Aid welcomes call for a global tax system that works for allhttp://www.ekklesia.co.uk/node/21754
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<p>Christian Aid has applauded a new report which demands fresh solutions to tax dodging by multinational companies.</p>
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<p>Christian Aid has applauded a new report which demands fresh solutions to tax dodging by multinational companies – a problem IMF researchers say could be costing developing countries $212 billion a year.</p>
<p>The report, from the Independent Commission for the Reform of International Corporate Taxation (ICRICT), warns that existing global tax rules are "obsolete and ineffective in preventing tax abuse by multinational corporations", because they are based on the legal ‘fiction’ that multinationals’ subsidiaries are separate entities.</p>
<p>It also argues that tax reform efforts by the Organisation for Economic Co-operation and Development are "a step in the right direction but fundamentally inadequate" - and that the OECD does not reflect the priorities of poor countries.</p>
<p>The new report comes days after International Monetary Fund researchers suggested that poor countries are losing as much as $212 billion a year to tax avoidance by multinationals – and considerably more than rich OECD countries, relative to the size of their economies.</p>
<p>Toby Quantrill, Principle Economic Justice Adviser at Christian Aid, said: “This is a staggering sum, which represents untold damage to the public services needed by people living in poverty in developing countries.”</p>
<p>He added: “ICRICT’s diagnosis is spot on, as is its argument that rich countries’ efforts to stop multinationals dodging tax are a step in the right direction but fundamentally inadequate.</p>
<p>“It is becoming ever clearer that the OECD’s work will be ineffective even for the richer and more powerful countries and do little or nothing for the poorest.</p>
<p>“It’s time for developing countries to start adopting their own reforms now, and for truly inclusive international co-operation that tackles tax reform from the perspective of the public interest.”</p>
<p>Examples of reforms that developing countries could adopt now are the imposition of withholding tax regimes to tax dividends before they can be paid to shareholders and the creation of bilateral or multilateral agreements to enable jurisdictions to apportion between them the revenues and costs attributable to multinationals operating within their borders.</p>
<p>In the longer term, the report suggests fundamental reform to the global institutions and rules by which multinational companies are taxed.</p>
<p>Christian Aid is part of the coalition of organisations that set up and supported ICRICT, along with Oxfam, ActionAid, the World Council of Churches, the Tax Justice Network, the Global Alliance for Tax Justice, Public Services International, Alliance Sud, CCFD-Terre Solidaire, the Council for Global Unions and the Friedrich Ebert Stiftung.</p>
<p>ICRICT is chaired by Jose Antonio Ocampo, a former United Nations Under-Secretary General and former Minister of Finance in Colombia, and includes a range of other tax and economics experts. The Commission aims to consider international corporate tax reforms from the perspective of the public interest, rather than national advantage, and to seek fair, effective and sustainable tax solutions for development.</p>
<p>Read the ICRICT report here: <a href="http://www.icrict.org/wp-content/uploads/2015/06/ICRICT_Com-Rec-Report_ENG_v1.3.pdf" title="http://www.icrict.org/wp-content/uploads/2015/06/ICRICT_Com-Rec-Report_ENG_v1.3.pdf">http://www.icrict.org/wp-content/uploads/2015/06/ICRICT_Com-Rec-Report_E...</a></p>
<p>* Christian Aid <a href="http://www.christianaid.org.uk/index.aspx" title="http://www.christianaid.org.uk/index.aspx">http://www.christianaid.org.uk/index.aspx</a><br />
* ICRICT <a href="http://www.icrict.org/" title="http://www.icrict.org/">http://www.icrict.org/</a></p>
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Living EconomyNews Briefchristian aidICRICTIMFmultinational corporationsoecdtax dodgingtax justiceWorld NewsTue, 02 Jun 2015 23:00:00 +0000agency reporter21754 at http://www.ekklesia.co.ukNepal due to make debt payments despite continuing crisishttp://www.ekklesia.co.uk/node/21710
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<p>Jubilee Debt Campaign has joined a call by more than 30 organisations across Asia for Nepal to receive immediate and unconditional debt cancellation.</p>
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<p>Jubilee Debt Campaign has joined a call by more than 30 organisations across Asia for Nepal to receive immediate and unconditional debt cancellation in the wake of two devastating earthquakes. It comes on the day (15 May) Nepal is due to make debt payments to the World Bank and the International Monetary Fund.</p>
<p>“We stand in solidarity with our colleagues and the rest of the Nepal in these critical moments. We ask governments, international financial institutions, international banks, and other lenders to do the same by immediately, totally, and unconditionally cancelling the country’s debts,” said Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD).</p>
<p>Nepal’s finance ministry reported that the country owes a total of almost $3.5 billion in external debts as of last October. Just above $3 billion are owed to multilateral banks such as the Asian Development Bank and the World Bank. The country is due to spend $210 million on debt repayments in 2015 alone, more than 5% of government revenue. This includes payments over 2015 of $48 million to the World Bank and $14 million to the IMF.</p>
<p>“Already a Least Developed Country, Nepal is pushed back at least by a decade in its development efforts by these devastating earthquakes,” said Dr. Sarba Khadka of Rural Reconstruction Nepal, an APMDD member organisation, which endorsed the alliance’s statement.</p>
<p>The alliance’s other Nepalese member organisations – mostly rural, human rights, and women’s groups currently providing relief support – supported the call along with movements from other countries.</p>
<p>“The advantage of debt cancellation is that it is fast,” said Jonathan Stevenson of the Jubilee Debt Campaign.</p>
<p>“Funds are freed up immediately for recovery and reconstruction. Instead, today’s payments will mean millions of dollars are flowing out of Nepal at the time of greatest need. Creditors, starting with the World Bank and Asian Development Bank, should take immediate steps to reverse this.”</p>
<p>More than 8,000 people have died and an estimated eight million people have been affected by the first, magnitude 7.8 earthquake which hit Nepal on 25 April. A magnitude 7.3 quake followed on 12 May claiming the lives of at least 76 more.</p>
<p> For details of debt statistics and payments, see:<br />
<a href="http://www.fcgo.gov.np/wp-content/uploads/QuarterlyDebtPosition_1st_Quarter_2071-72.pdf" title="http://www.fcgo.gov.np/wp-content/uploads/QuarterlyDebtPosition_1st_Quarter_2071-72.pdf">http://www.fcgo.gov.np/wp-content/uploads/QuarterlyDebtPosition_1st_Quar...</a><br />
<a href="http://www.imf.org/external/np/fin/tad/extforth.aspx?memberkey1=690&amp;date1key=2015-03-31&amp;category=forth&amp;year=2015&amp;trxtype=repchg&amp;overforth=f&amp;schedule=exp&amp;extend=y" title="http://www.imf.org/external/np/fin/tad/extforth.aspx?memberkey1=690&amp;date1key=2015-03-31&amp;category=forth&amp;year=2015&amp;trxtype=repchg&amp;overforth=f&amp;schedule=exp&amp;extend=y">http://www.imf.org/external/np/fin/tad/extforth.aspx?memberkey1=690&amp;date...</a><br />
<a href="http://www.imf.org/external/pubs/ft/scr/2014/cr14214.pdf#page=45" title="http://www.imf.org/external/pubs/ft/scr/2014/cr14214.pdf#page=45">http://www.imf.org/external/pubs/ft/scr/2014/cr14214.pdf#page=45</a> <a href="http://go.worldbank.org/WM04979650" title="http://go.worldbank.org/WM04979650">http://go.worldbank.org/WM04979650</a></p>
<p>* Jubilee Debt Campaign <a href="http://jubileedebt.org.uk/" title="http://jubileedebt.org.uk/">http://jubileedebt.org.uk/</a></p>
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Living EconomyNews Briefdebt cancellationearthquakeIMFjubilee debt campaignNepalWorld BankWorld NewsFri, 15 May 2015 23:00:00 +0000agency reporter21710 at http://www.ekklesia.co.ukLending boom to impoverished countries threatens ‘Greece style’ debt crisishttp://www.ekklesia.co.uk/node/21565
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<p>Figures calculated by the Jubilee Debt Campaign, based on recent data from the World Bank show that loans to impoverished countries have almost tripled since 2008.</p>
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<p>Figures calculated by the Jubilee Debt Campaign, based on recently released data from the World Bank, show that loans to impoverished country governments have increased by 40 per cent in just one year, and have almost tripled since the global financial crisis began in 2008.</p>
<p>Lending to ‘low income countries’ increased to $17.3 billion in 2013, the latest year with figures available, up from $12.2 billion in 2012 and $6.1 billion in 2008. Of the loans since the global financial crisis began, 63 per cent are from multilateral institutions, primarily the World Bank and International Monetary Fund, 27 per cent from governments such as China, Japan, France and Germany, and 10 per cent from private lenders.</p>
<p>Tim Jones, economist at the Jubilee Debt Campaign, said: “The current boom in lending is being fuelled by donors giving more ‘aid’ as loans rather than grants, and low interest rates in the US and Europe leading to speculation on developing country debts. A ‘Greece style’ debt crisis could be just around the corner unless action is taken to increase government revenues through tackling tax avoidance and evasion, and measures introduced to signal that reckless lenders will no longer be bailed out.”</p>
<p>Previous research by the Jubilee Debt Campaign has shown that two-thirds of impoverished countries face large increases in the share of government income spent on debt payments over the next ten years. On average, current lending levels will lead to increases of between 85 per cent and 250 per cent in the share of income spent on debt payments, depending on whether economies grow rapidly, or are impacted by economic shocks. The new increase in lending will only heighten concerns about the possibility of future debt crises.</p>
<p>One of the first countries to be entering a new debt crisis is Ghana. Two weeks ago, IMF staff reached an agreement to lend $310 million a year over three years to Ghana, in order to bailout previous lenders. This money will be used exclusively to meet debt payments to other foreign lenders to the West African country, which equal $1.2 billion to $1.6 billion a year over 2015 to 2017 (16-19 per cent of government revenue).</p>
<p>In September 2014, the United Nations passed a resolution to begin negotiations on creating a ‘bankruptcy’ process for governments. Such a mechanism would indicate that reckless lenders would no longer be bailed out by the IMF and other public institutions, as is happening in Ghana and has happened in Greece. </p>
<p>Campaigners warn that these bailouts of lenders incentivises them to continue lending recklessly, whilst leaving large debts with the country concerned. Just 11 countries voted against the UN negotiations taking place, but this included the UK, US, Germany and Japan. The next negotiating session at the UN will take place on 28-30 April 2015.</p>
<p>* Jubilee Debt Campaign <a href="http://jubileedebt.org.uk/" title="http://jubileedebt.org.uk/">http://jubileedebt.org.uk/</a></p>
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Living EconomyNews Briefdebtdebt reliefIMFindebted countriesjubilee debt campaignWorld BankWorld NewsTue, 31 Mar 2015 23:00:00 +0000agency reporter21565 at http://www.ekklesia.co.ukUK campaigners condemn 'vulture capital' court verdicthttp://www.ekklesia.co.uk/node/18890
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<p>UK campaigners have slammed a US court decision which they say allows Argentina to be ‘held to ransom’ by vulture funds.</p>
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<p>A US court has put rights of billionaire investors above the people of Argentina, say debt activists, slamming a decision for allowing the country to be ‘held to ransom’ by vulture funds. </p>
<p>The reaction from the UK-based Jubilee Debt Campaign came after Argentina lost its appeal in New York against ‘vulture funds’ NML Capital Ltd and Aurelius Capital. The judgement brings Argentina one step nearer to a default. </p>
<p>The New York appeals court upheld a ruling that Argentina must repay the vulture funds every time it repays its standard creditors, and forces banks processing such payments to comply with the order. It leaves Argentina with a choice between paying vulture funds which speculated on the country’s bankruptcy back in 2002 and which is forbidden by Argentine law, or triggering another default. </p>
<p>Any default will be put off until the US Supreme Court decides whether it will hear an appeal of the case. </p>
<p>Nick Dearden, Director of Jubilee Debt Campaign, said: “It cannot be right that this court has put the rights of a couple of billionaire speculators above the rights of millions of people in Argentina to enjoy a decent standard of living. A whole country is being held to ransom by these vulture funds.</p>
<p>“These funds never lent money to Argentina. They speculated on Argentina's crisis, buying debt very cheap in the hope that the country would go bankrupt, and then refusing to join the vast majority of Argentina's 'creditors' in negotiating a reduction in the value of their debt. </p>
<p>“The US Government and International Monetary Fund must take their share of the blame for this decision, as both pulled back from asking the Supreme Court to review the matter, sending a clear message that they were washing their hands of it. </p>
<p>“If countries want to protect their right and duty to represent their people they must stand up against this bullying,” Mr Dearden declared. </p>
<p>In 2001 Argentina defaulted on unaffordable debt payments. At the time the Argentinian people had experienced three years of recession and over half the population, 20 million people, were living below the poverty line. Much of the debt from this time was regarded as illegitimate by Argentina’s people, originating in the brutal dictatorship of the late 1970s and early 1980s, a period known as the 'dirty war' when 30,000 people were 'disappeared'</p>
<p>The Argentine government subsequently reached a deal with most creditors to pay the equivalent of 25-35 cents on every dollar owed, over several years. However some creditors refused to accept this deal, known as ‘holdouts’. These holdouts include vulture funds such as NML (a subsidiary of Elliot Associates), which are thought to have bought Argentinian debt at knock-down prices during the early 2000s debt crisis, and are now suing for exorbitant profits. Argentina is making debt payments to the creditors which accepted the deal, but not the holdouts.</p>
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Living EconomyPeace and NonviolencePeople and PowerNews BriefArgentinadebtdebt justice actionIMFjubilee debt campaignUS governmentvulture fundsWorld NewsSat, 24 Aug 2013 14:09:54 +0000agency reporter18890 at http://www.ekklesia.co.ukIMF loan for Pakistan repeats history of failed bailoutshttp://www.ekklesia.co.uk/node/18609
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<p>The International Monetary Fund has agreed in principle to lend $5.3 billion to Pakistan over three years.</p>
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<p>The International Monetary Fund (IMF) has agreed in principle to lend $5.3 billion to Pakistan over three years.</p>
<p>The money will be used simply to make debt payments, primarily to the IMF itself. The loans are due to be ratified by the IMF’s Board in September, if Pakistan implements IMF economic conditions in the meantime. The exact economic conditions which will be expected of Pakistan have not been released.</p>
<p>This year the Pakistan government is expected to spend $5.6 billion on foreign debt payments, rising to $6.2 billion next year. This is over 20 per cent of government revenue.</p>
<p>Tim Jones, Policy Officer at Jubilee Debt Campaign, said: “The IMF has been lending to Pakistan for thirty of the last forty years. A new loan will just repeat the failed cycle of bailouts and austerity. We believe that much of Pakistan’s debt is odious, having been run-up by various military regimes. Rather than an IMF loan, Pakistan needs a freeze on debt payments, and a public audit to find out how legitimate the debt is, and to learn lessons to prevent debts increasing again.”</p>
<p>In May 2013, Jubilee Debt Campaign and Islamic Relief published a report on the history of Pakistan’s debt crisis. The report called for:<br />
• A public audit into the debt<br />
• A moratorium on debt payments, and ultimately cancellation of unjust and unsustainable debts<br />
• Lenders such as the IMF to stop demanding regressive tax reforms, and assist Pakistan in collecting tax owed by the wealthy<br />
• An end to military action which is killing thousands of people, increasing extremism, and costing the Pakistani people billions of dollars<br />
• The Pakistan government to be allowed to regulate foreign investment, to prevent unsustainable debts being created.</p>
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Living EconomyNews Briefdebtdebt cancellationIMFIslamic Reliefjubilee debt campaignpakistanWorld NewsThu, 04 Jul 2013 14:53:49 +0000agency reporter18609 at http://www.ekklesia.co.ukUK 24th out of 33 in economic recovery, says new reporthttp://www.ekklesia.co.uk/node/18373
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<p>The UK is experiencing a slower economic recovery than 23 of the 33 advanced economies monitored by theIMF, according to new analysis published by the TUC.</p>
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<p>The UK is experiencing a slower economic recovery than 23 of the 33 advanced economies monitored by the International Monetary Fund (IMF), according to new analysis published by the Trades Union Congress (TUC) yesterday (8 May).</p>
<p>The research, which comes as the IMF begins its two week visit to Britain today, says UK income per capita economic growth that takes account of population change will not return to its pre-crash level until 2017.</p>
<p>By contrast, the figures in Germany and the US will be over 10 per cent higher a decade on from the financial crisis, while South Asian economies are set to have growth of over 20 per cent.</p>
<p>The TUC says the figures, which are based on the IMF's latest GDP forecasts, reveal that the UK risks enduring a 'lost decade of growth', while many of its economic rivals forge ahead.</p>
<p>With the Chancellor identifying an economic 'global race' as the defining challenge for the government, the TUC report shows how George Osborne's own strategy is causing the UK to fall behind its competitors.</p>
<p>The study also reveals how the UK is emerging from recession at a slower rate than at any time in its recent history.</p>
<p>In 1985, UK income per head was six per cent higher than it was before the 1980 crash. In 1995 it was seven per cent higher than it was before the 1990 recession. UK income per head today is still six per cent below its 2008 level.</p>
<p>The Chancellor cannot blame Europe for the UK's economic woes, as the vast majority of the Eurozone's countries are performing better, says the TUC.</p>
<p>George Osborne faces further embarrassment this week when he hosts a meeting of the G7 finance ministers on Friday. Only Italy are experiencing a slower recovery than the UK among G7 countries.</p>
<p>Recent TUC analyses of the 'global race' - available at <a href="http://www.touchstoneblog.org.uk/tag/global-race" title="www.touchstoneblog.org.uk/tag/global-race">www.touchstoneblog.org.uk/tag/global-race</a> - have found that the UK is also lagging behind most of its G7 competitors on exports, wage growth and manufacturing.</p>
<p>George Osborne must heed the IMF's recent call for the UK to ease off austerity and follow the example of the US by investing in jobs and infrastructure, says the TUC.</p>
<p>The TUC wants to see a large jobs and infrastructure stimulus, including a jobs guarantee and an extensive house building programme to get growth and confidence back into the economy.</p>
<p>TUC General Secretary Frances O'Grady said: "We truly are experiencing a lost decade for growth.</p>
<p>"While other countries are already seeing a rise in economic output, the UK won't return to its pre-crash level for another four years.</p>
<p>"The Chancellor's commitment to self-defeating austerity has prolonged people's suffering and put the brakes on our economic recovery - so much so that escaping a triple-recession is considered by some to be a cause for celebration.</p>
<p>"Even George Osborne's favourite economic institution, the IMF, is calling on him to change course. Without a fresh approach we will continue to trail our economic rivals and bring up the rear in the global economic race."</p>
<p> She concluded: "He should start learning from countries like the US whose ambitious programme of investment in jobs is helping to turn its economy around."</p>
<p>[Ekk/4]</p>
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Living EconomyNews Briefausterityeconomic growthG7George OsbornegrowthIMFrecessionukUK NewsThu, 09 May 2013 09:14:11 +0000agency reporter18373 at http://www.ekklesia.co.ukDebt threat returns to global southhttp://www.ekklesia.co.uk/node/16672
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<p>Startling new research has found that debt burdens in impoverished countries have increased significantly since the debt cancellation of the 2000s.</p>
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<p>Startling new research by the Jubilee Debt Campaign has found that debt burdens in impoverished countries have increased significantly since the debt cancellation of the 2000s.</p>
<p>This follows the fallout from the global financial crisis as well as private sector expansion in the global south. The report finds this threatens to extend the 30-year pattern of debt crises across the globe, from the Mexican debt crisis of 1982 to the Eurozone debt crisis of today.</p>
<p>Campaigners have responded by calling for a “new debt jubilee”. In the late 1990s and early 2000s, churches and Christian groups joined with wide range of civil society groups, charities and NGOs to lobby for cancellation of debts owed by the global south to the west. They celebrated partial success, but the results now appear to be under threat. </p>
<p>The report, <em>The State of Debt: Putting an end to 30 years of debt crisis</em>, investigates for the first time the external debts of both governments and the private sector in low and lower middle income countries. </p>
<p>Analysing newly-compiled data from international financial institutions, it finds that private sector debt payments out of impoverished countries are now double those of the public sector, a complete turnaround since the year 2000. High private sector debts have been the main cause of the financial crisis in countries such as Spain, Ireland, Iceland and the UK.</p>
<p>The report’s author, economist Tim Jones said, “The rich world is currently gripped by a debt crisis caused primarily by reckless lending and borrowing between private banks. Worryingly, this kind of dangerous debt is now on the increase in impoverished countries, at a time when world leaders think the problem of Third World Debt has been solved.”</p>
<p>He insisted that the problem could be solved only with major change to international economic systems. “We urgently need a global system for regulating the way money moves around the world, to prevent large debts being created between countries, and bring thirty years of destructive debt crises to an end.”</p>
<p>Jones’ report finds that the negative impacts of the financial crisis – including falling trade revenues, loss of money sent home from migrants and multinational companies sending more money back to the rich world – have seen lending to the 35 most impoverished country governments almost double from $5 billion in 2007 to $9 billion in 2009. </p>
<p>As a result, government debt payments by impoverished countries are predicted to rise by a third by 2014. </p>
<p>Perhaps the report’s most alarming finding is that three of the countries that had some of their debt cancelled in response to the global jubilee campaign – Mozambique, Ethiopia and Niger – are all soon expected to be spending as much on foreign debt payments as they were before receiving debt relief. </p>
<p>The International Monetary Fund (IMF) and World Bank say 19 of the 32 countries that have received debt relief are at high or moderate risk of not being able to pay their debts. Despite this, the IMF and World Banks are themselves the largest lenders to the most impoverished countries - responsible for 45 per cent of new loans. </p>
<p>Jones acknowledged that “debt cancellation has led to falling debt burdens, and increased government spending in areas such as education”. </p>
<p>But he added, “Too little has been done to prevent debts increasing again, and financial deregulation has left countries vulnerable to the knock-on effects of debt crisis in the rich world. It is shocking that the IMF and World Bank themselves are responsible for almost half the lending to low income governments. </p>
<p>Jones and the Jubilee Debt Campaign called for “a new debt jubilee that involves not just one-off cancellation, but measures to prevent large debts being created”. </p>
<p>Thirty-two countries have had $120 billion of debt cancelled over the last decade in response to the global Jubilee campaign. Government foreign debt payments in these countries have fallen from 20 per cent of government revenue in 1998 to less than five per cent in 2010. In these countries, the number of children enrolled in primary school has increased from 63 per cent in 2000 to 83 per cent in 2010.</p>
<p>Some countries which did not qualify for debt cancellation continue to have extremely high debt burdens. The Philippines, Sri Lanka and El Salvador all spend a quarter of government revenue on foreign debt payments.</p>
<p>The report includes case studies of Jamaica, Sri Lanka, Mozambique, Ethiopia and Georgia.</p>
<p>[Ekk/1]</p>
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Beliefs and ValuesLiving EconomyNews BriefdebtEthiopiaIMFjubilee 2000jubilee debt campaignMozambiquenigerWorld BankWorld NewsTue, 22 May 2012 12:08:42 +0000staff writers16672 at http://www.ekklesia.co.ukG20 failure to tackle debt ‘incredible’http://www.ekklesia.co.uk/node/15662
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<p>In the midst of another global debt crisis, the most powerful countries are still failing to regulate irresponsible lenders, says Jubilee Debt Campaign.</p>
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<p>Commenting on the failure of the G20 to do anything to bring in a global system to deal with debt crises, Tim Jones, Policy Officer at Jubilee Debt Campaign said: “It is incredible that the in the midst of another global debt crisis, the most powerful countries are still failing to regulate irresponsible lenders."</p>
<p>Jones continued: "An orderly system is needed to cancel unjust debts, neutral of both creditors and debtors. Yet the G20 seem happy to continue with the debt debacle currently being played out in Europe, as has been seen across the world for the last thirty years."</p>
<p>He added: “The continuing history of debt crises - from Africa, Latin America, East Asia and now Europe – is that loans to bailout private creditors and enforced austerity do not work. Instead, reckless lenders need to be made responsible for their actions and debts cancelled. Global rules are needed to enable this to happen.”</p>
<p>Commenting on the ongoing European debt crisis, the Jubilee Debt Campaign officer continued: “There is still far too much obsession with bailing out banks, rather than cancelling debt. The people of Greece, Ireland and Portugal continue to have austerity forced on them whilst reckless private lenders get bailed out. European leaders have belatedly recognised the need for reckless private lenders to make serious reductions in their claimed debt from Greece. But without global regulations on private lenders, they are left making voluntary pleas for creditors to reduce debts.</p>
<p>“Many creditors, such as unscrupulous vulture funds, plan to ignore any voluntary write-downs and claim inflated debts for years to come. Meanwhile, the bank bailout and austerity plan which has failed so spectacularly in Greece continues on hyperdrive across the continent. When a country has too much foreign debt, austerity cannot reduce it."</p>
<p>Reagrding the pledge of extra resources for the International Monetary Fund, Tim Jones declared: “Giving the IMF more money to lend just continues the debt and austerity cycle. When you are in a hole you should stop digging. The G20 should have been working out how to reduce unjust debt burdens, not create more.” </p>
<p><em>Ekklesia is an affiliate of the Jubilee Debt Campaign</em></p>
<p>[Ekk/3]</p>
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Living EconomyNews Briefdebtg20g20 summitIMFInternational Monetary Fundjubilee debt campaignWorld NewsFri, 04 Nov 2011 17:33:45 +0000agency reporter15662 at http://www.ekklesia.co.ukWrite-down of 50 per cent in Greece's private debt 'not enough'http://www.ekklesia.co.uk/node/15440
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<p>Campaigners have warned that the rumoured 50 per cent write-down in Greece’s debt not enough to get out of debt and austerity trap.</p>
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<p>Debt campaigners have warned that the if the rumoured 50 per cent write-down in Greece’s debt owed to private creditors goes ahead, it will not be enough to get the country out of its debt and austerity trap.</p>
<p>Jubilee Debt Campaign pointed out that 20 per cent of Greece’s debt is now owed to EU bodies and the IMF. </p>
<p>A 50 per cent write down in debt owed to private creditors would still leave the Greek government with a foreign debt of 90 per cent of GDP.</p>
<p>Greece’s public sector external debt currently stands at 146 per cent of GDP - that is €329 billion. The IMF and EU have so far lent the country €65 billion since May 2010. That is 20 per cent of Greece’s debt. This does not include the Greek bonds bought by the European Central Bank.</p>
<p>The Jubilee Debt Campaign estimates that Greece's debt owed to private creditors (including the ECB) is €264 billion. A 50 per cent reduction in this would be €132 billion, leaving a remaining debt of €197 billion. This would leave Greece with a public external debt of 88 per cent of GDP, which would rise again with new loans from the IMF and EU and recession in the wake of continued austerity.</p>
<p>Jubilee Debt Campaign's Senior Policy Officer Tim Jones said: "For the past 18 months the IMF and EU have been bailing out banks through giving new loans to Greece. Even if private creditors are made to write-down 50 per cent of their remaining debt, this will no longer be enough to save Greece from the debt and austerity trap. Including the debt owed to the IMF and EU, Greece’s total foreign debt would still be 90 per cent of GDP.</p>
<p>"The IMF and EU continue to base their decisions on how to save the money of reckless banks, rather than providing light at the end of the tunnel to the people of Greece. It makes no sense to write-off some debt, whilst creating an even bigger pot of loans. There needs to be much larger cancellation of Greek debt, possibly including that created by the IMF and EU loans which have already bailed-out some of the reckless bank lending." </p>
<p>The loans from the IMF and EU are at higher interest rates than their own borrowing, which means they are profiting from lending to Greece. </p>
<p>The IMF projects that it will make a profit of $1.2 billion in 2011 rising to $2.3 billion in 2012, primarily from their lending to countries such as Greece and Ireland, as well as developing countries such as Pakistan and Jamaica. </p>
<p>When it defaulted at the end of 2001, Argentina’s government foreign debt was 80 per cent of GDP, according to figures from the World Bank. The UK’s current government foreign debt is around 15 per cent of GDP according to the IMF.</p>
<p>[Ekk/2]</p>
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Living EconomyNews Briefdebt crisisgreeceIMFUK NewsWorld BankTue, 27 Sep 2011 09:45:46 +0000staff writers15440 at http://www.ekklesia.co.ukNew IMF boss must be chosen fairly, say NGOshttp://www.ekklesia.co.uk/node/14814
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<p>Civil society groups are calling for an open and fair process to elect the new head of the International Monetary Fund following Strauss-Kahn's resignation.</p>
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<p>International civil society groups are calling for an open and merit-based process to elect the new head of the International Monetary Fund (IMF). Dominique Strauss-Kahn resigned from the position last week, saying he wanted to devote all his energy to fighting an allegation of attempted rape. </p>
<p>The sudden departure of Strauss-Kahn has left the 187 member governments of the IMF with the task of selecting a new managing director during a time of economic instability. But several NGOS argue that it also provides an important opportunity to overhaul the selection process, which is widely regarded as unfair. </p>
<p>Past agreements between Europe and the US ensure that the IMF Managing Director is always European and the President of the World Bank is always American. Civil society campaigners across the globe are calling for an end to this tradition, and demanding greater representation for middle and lower-income countries.</p>
<p>They argue that issues of debt and poverty will only be best addressed when lower-income nations are given a bigger voice in international institutions.</p>
<p>“The IMF must be seen to reflect the interests of all its member nations," said James Picardo, Campaign Director of Jubilee Scotland, "And this is undermined when the post of IMF Managing Director is always filled by a European". </p>
<p>He argued, "Voting for Strauss-Kahn’s successor must be open to all nationalities based on merit, and use an open and transparent process.”</p>
<p>Much of the work that the World Bank and IMF perform is in relation to lower and middle-income countries. However, the IMF post is filled by votes from its 24-member executive board – the majority of who are G7 powers.</p>
<p>The civil society call came as Germany’s Angela Merkel – who leads Europe’s biggest economy – called for the next IMF head to be a European candidate. </p>
<p>In 2009, the IMF agreed to “adopt an open, merit-based and transparent process for the selection of IMF management". However, critics say that since then, two Deputy Managing Directors of the IMF have been appointed without such a process.</p>
<p>Picardo demanded that the IMF “stand by their promise and elect the new IMF head through the backing of a majority of countries, rather than a majority of shares". </p>
<p>[Ekk/1]</p>
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Living EconomyNews Briefglobal financeIMFJubilee ScotlandWorld NewsSun, 22 May 2011 11:36:10 +0000staff writers14814 at http://www.ekklesia.co.ukDebt, gold and the IMF windfallhttp://www.ekklesia.co.uk/node/14487
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<h1 class="title">Debt, gold and the IMF windfall</h1>
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<p><a href="http://www.ekklesia.co.uk/node/14487" target="_blank">read more</a></p>Living EconomyNews Briefalternative economicsdebtdebt reliefgoldIMFInternational Monetary Fundjubilee debt campaignBlogMon, 04 Apr 2011 16:33:15 +0000Tim Jones14487 at http://www.ekklesia.co.ukSouth Sudan should not be born into debthttp://www.ekklesia.co.uk/node/13915
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<p>If South Sudan secedes, the new country should not start life with a debt burden, says the Jubilee Debt Campaign</p>
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<p>The referendum on secession for South Sudan is due to start on Sunday, 9 January. If the people of South Sudan vote to secede, a key decision will be what happens to Sudan’s external debt of $35 billion, $20 billion of which is interest on original loans.</p>
<p>Tim Jones, policy officer at Jubilee Debt Campaign, said: “No nation should be born into debt. The people of South Sudan need a fair start rather than taking on the burden of past unjust debts. If South Sudan does inherit any debt it should be immediately cancelled.</p>
<p>"The history of debt is that it is used by the IMF and World Bank to force free market economic policies on countries. The people of South Sudan are voting for independence, not to become subservient to organisations in Washington DC.”</p>
<p>Much of Sudan’s debt dates back to the early 1980s from the dictatorship of Gaarfar Nimeiry, when western governments supported the regime during the Cold War and to gain access to Sudanese oil for their companies. In 1985, it was $9 billion but has since grown to $35 billion due to interest and charges, as well as to new loans to the dictatorship of Omar al-Bashir.</p>
<p>Tim Jones said: “Sudan’s debt is illegitimate, coming from Cold War loans to dictator Nimeiry or more recent loans to the regime of Omar al-Bashir. The debt has served the interest of foreign powers, not the people of Sudan.”</p>
<p>Over recent years, 32 countries have had debts cancelled through the official IMF and World Bank debt relief process. Both Sudan and South Sudan potentially qualify for this debt relief. However, this usually takes several years, requires countries to make repayments in the meantime, leads to new loans and debts being created, and requires countries to follow IMF and World Bank conditions such as privatisation and deregulation.</p>
<p>The UK government claims Sudan owes it £650 million as a result of past failed export projects. However, the UK government has not revealed what projects this debt ultimately supported. If and when any or all of this debt is cancelled, the UK government will count this as ‘aid’. </p>
<p>[Ekk/4]</p>
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Living EconomyNews Briefdebtdebt reliefIMFjubilee debt campaignreferendumSudanWorld BankWorld NewsSat, 08 Jan 2011 17:15:21 +0000agency reporter13915 at http://www.ekklesia.co.ukClient economics in West Africahttp://www.ekklesia.co.uk/node/13913
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<h1 class="title">Client economics in West Africa</h1>
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<p><a href="http://www.ekklesia.co.uk/node/13913" target="_blank">read more</a></p>Living EconomyNews Briefcorporatesdeveloping worldeconomicsfoodghanaGlobalisationIMFWest AfricaWorld BankBlogSat, 08 Jan 2011 16:22:58 +0000Simon Barrow13913 at http://www.ekklesia.co.uk